South Africa’s energy landscape is undergoing a profound transformation. While national headlines often focus on load shedding and the challenges facing Eskom; South Africa's state-owned electricity public utility, responsible for generating approximately 90% of the electricity used in the country, a significant shift is taking root at the local level. Municipalities across the country are beginning to explore new pathways to energy security, economic resilience, and climate action.
Through the UK PACT (Partnering for Accelerated Climate Transitions) programme, the United Kingdom is working in partnership with South Africa to accelerate the just energy transition. One impactful initiative to date is a UK PACT-funded project led by the University of Pretoria (UP), which equips municipalities with the tools, knowledge, and confidence to procure electricity from Independent Power Producers (IPPs).
Municipalities are central to South Africa’s electricity distribution system, yet they have historically faced significant barriers to independently sourcing power. Regulatory complexity, limited technical capacity, and a lack of standardised procurement frameworks have constrained their ability to diversify energy supply and integrate renewable sources.
Recognising this challenge, UK PACT supported a consortium led by UP, legal experts, and local consultants with the South African Local Government Association (SALGA) as the government counterpart. The project aimed to build institutional capacity and enable municipalities to engage directly with IPPs in a legally sound, financially viable, and socially inclusive manner.
The project delivered a suite of first-of-their-kind knowledge products and training interventions, including:
- A Municipal IPP Project Preparation and Procurement Manual
- A Municipal Power Purchase Agreement (PPA) Guideline
- Template documents and terms of reference for immediate municipal use
- A summary booklet, training slides and recorded sessions to support ongoing learning
- Four training sessions (two online, two in person) reaching 154 participants from 62 organisations, including over 50 municipalities
- Importantly, the project embedded Gender Equality, Disability and Social Inclusion (GEDSI) principles throughout its design and delivery, both in content and team composition.
- Innovative tools such as Multi-Criteria Decision Analysis (MCDA) were also introduced, enabling municipalities to access energy technology options based on financial, technical and social trade-offs.
The impacted municipalities have been empowered to:
- Initiate and manage their own IPP procurement processes
- Negotiate and sign PPAs with greater legal and financial assurance
- Integrate inclusive development objectives—such as local job creation and support for women-owned enterprises—into energy strategies.
Crucially, this initiative produced the first comprehensive, locally relevant set of guidelines for municipal IPP procurement in South Africa—filling a long-standing gap in the sector.
The ability of municipalities to procure their own power is a critical enabler of South Africa’s just energy transition. It allows local governments to:
- Accelerate the adoption of renewable energy
- Improve energy reliability and affordability
- Stimulate local economic development
- Promote inclusive and sustainable growth
This aligns directly with UK PACT’s mission to support transformational change that is inclusive, equitable, and climate-resilient.
The UP-led project is one of several UK PACT-funded initiatives in South Africa that are advancing decentralised energy systems, institutional capacity building, and inclusive development. Other examples include:
- A green hydrogen export feasibility study in the Eastern Cape
- Technical support to the Presidential Climate Commission (PCC) on energy pricing and distribution reform
- Collaboration with the Development Bank of Southern Africa (DBSA) to unlock finance for municipal solar PV projects
Together, these projects reflect UK PACT’s commitment to unlocking local capacity, enabling low-carbon development, and ensuring that the benefits of climate action are widely shared.
The knowledge products developed through this project are now publicly available via the SALGA website. The training sessions have sparked significant interest, and discussions are underway to embed these tools within key institutions such as SALGA, the Department of Mineral Resources and Energy, and National Treasury. Further announcements regarding host institutions are expected soon.
As more municipalities take steps toward energy independence, this project stands as a model of what is possible through strategic partnerships, local leadership, and targeted technical assistance. It exemplifies UK PACT’s approach to delivering climate action that is practical, inclusive, and transformative.
Learn more about UK PACT’s work in South Africa and how we are advancing climate action through transformative partnerships.
